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"compensation" for purposes of calculating the allowable
deduction for a contribution to an Individual Retirement Account
(IRA) under section 219(b).2
Some of the facts have been stipulated, and those facts,
with the annexed exhibits, are so found and are incorporated
herein by reference. At the time the petition was filed,
petitioner's legal residence was Northport, New York.
During 1992, petitioner earned $306.26 in taxable wages,
$299.36 in taxable interest, $106 for jury duty service, and
received $10,660 in unemployment compensation. Petitioner
properly reported all of this income on his 1992 Federal income
tax return (return).
Petitioner contributed $2,000 to an IRA in 1992 and claimed
a contribution deduction for this amount on his 1992 return. In
the notice of deficiency, respondent disallowed $1,694 of
petitioner's IRA contribution deduction, the amount by which the
deduction exceeded his taxable wages of $306.26.
In calculating the amount of the contribution deduction,
petitioner considered the unemployment benefits he received in
1992 to be "compensation", as that term is used in section
219(b)(1)(B). Respondent contends that unemployment benefits do
2
In the notice of deficiency, respondent made adjustments to
petitioner's medical and miscellaneous expense deductions. These
adjustments are computational and will be resolved by the Court's
holding on the issue in this case.
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Last modified: May 25, 2011